Sensex drops by 142 points on weak global cues

The 30-share barometer fell by 141.97 points to 18,327.98 points. The index had gained 247 points in the last two trading sessions.

Similarly, the broad-based National Stock Exchange index Nifty dropped by 36.60 points to 5,494.40 points.

Global stock markets declined on renewed concern about the euro debt crisis and rising crude oil prices that might curb global economic growth.

Banking and metal stocks fell on fears that easing food inflation might be temporary and the Reserve Bank of India might further hike interest rate in its policy meeting next week.
The food inflation fell to 9.52 per cent for the week ended February 26 from 10.39 per cent in the previous week.

Crude oil climbed as escalating violence in Libya, Africa’s third-largest producer, renewed concern that supply disruptions may spread in the Middle East.

Marketmen said the investor confidence remained jittery on fears of more tightening measures to stablise economic growth in the RBI policy review scheduled next week.

The financial company stocks remained under pressure and suffered the most as the government has increased its repurchase rate seven times in the past year to 6.5 per cent to stem inflation.

The Sensex has lost 13 per cent from its record level on November 5, making it the world’s third-worst performing benchmark index on concern government measures to quell inflation will hurt economic growth.

The banking index fell by 1.16 per cent to 12,313.14 as stocks of SBI, ICICI Bank and HDFC Bank declined.

The metal index dropped by 1.30 per cent to 15,666.92 followed by Teck index by 0.54 per cent to 3,656.65. IT index lost 0.53 per cent to 6,242.98, consumer durable index by 0.53 per cent to 5,760.96 and FMCG index 0.46 per cent to 3,490.64.

As the selling pressure spread over a wide-front, smallcap index lost 0.25 per cent to 7,989.69 and midcap index by 0.07 per cent to 6,599.79.